Russia’s hydrogen strategy: a work in progress. OSW Commentary 2020-07-22.

Kardaś, Szymon (2020) Russia’s hydrogen strategy: a work in progress. OSW Commentary 2020-07-22. UNSPECIFIED.

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Abstract

In recent years, numerous countries have adopted their national hydrogen strategies and begun to implement them. In July 2020, the European Union also adopted its strategic document in this field. Although the actions described in the document will impact the prospects of Russia exporting its fuels, Russia has only just begun to devise its position regarding this matter. To date, the first draft of the road map for the development of hydrogen energy in 2020–2024 has been compiled. Hydrogen energy is not among the priorities of Russia’s energy policy. This is confirmed both by the content of Russian strategic documents and by the limited actions of the Russian leadership and energy companies carried out to date. These actions are currently limited to research and development initiatives and pilot projects. International cooperation in the field of hydrogen energy involving Russian companies is also rather limited. Russia has major potential for hydrogen production. The main obstacle to the development of the domestic hydrogen energy sector is posed by the absence of significant genuine interest from the central authorities in challenges related to global climate change; this translates into very limited regulatory and funding activity. It should not be expected that the development of this sector could be boosted by internal factors (the Kremlin views neither decarbonisation nor the need to increase the share of renewable energy sources in the energy mix as priorities). However, this development could be facilitated by changes happening in its export markets. It is highly likely that the implementation of hydrogen strategies in the EU (Germany in particular) could trigger increased interest from Gazprom in hydrogen energy. Due to the political support from the Russian leadership it receives, Gazprom is likely to boost its position in its strategic export market. In addition, Moscow can expect that its cooperation in the field of hydrogen energy could help it not only to tighten its economic relations with the EU, but to also win another instrument to lobby in favour of a normalisation of political relations between Russia and the EU. Alongside this, in the long term the “hydrogen revolution” may pose a major challenge for Russia – energy transition in the strategic export markets (the EU, Asian countries) may translate into a rapid decline in the export of Russian fossil fuels, which will likely have serious negative economic consequences for Moscow.

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